In the Sept. 1 edition of the New York Times there is an article titled, “Overpriced Real Estate? Well, Maybe It’s Art.” Reporter James B. Stewart explains how wealthy investors have recently been willing to pay upwards of $100 million for real estate properties in Manhattan, Miami, Los Angeles and a few other places. Some real estate professionals have begun to explain the stratospheric prices as yet another way for billionaires to collect “art.” One agent said, “When we call a property art, it tends to have architectural or historical significance.”

Others such as David Kusin, a former art curator at the Metropolitan Museum of Art, thinks such claims are nonsense. “There’s absolutely no statistical validity to it…. When people get crazy over something, they like to rationalize what they do.” Justification is the predominant theme Kusin asserts.

Market Overview – What We Know:

Major indexes recovered somewhat last Friday, but prices were generally lower after creation of short-term high back on August 21 (1426.68—S&P 500).

Recent low trading volume was amplified last week in front of upcoming Labor Day weekend. NYSE activity diminished nearly 4% on week and Average Price per Share fell 76 cents to $58.81.

Short-term trend was last back in “prove it” mode and must rally above upper edge of 10-Day Price Channels (1416.10—S&P 500 through Tuesday) to suggest positive reversal.

Short-term Momentum in S&P 500 was fractionally positive after toying with negative readings for most of last week. One of our two proprietary Minor Cycle Trading Oscillators is negative, the other on the verge of negativity. Intermediate Cycle remains positive toward “Overbought.”.

MAAD was negative last week with 4 issues positive and 16 negative. MAAD Weekly Ratio was marginally “Overbought” at 1.12 with MAAD Daily Ratio “Oversold” at .87. Daily MAAD remains below its July 3 high despite higher S&P prices with similar action in Weekly MAAD that continues to hold below its April 2011 high, again despite higher S&P prices.

Weekly CPFL was negative last week by 2.05 to 1 with indicator continuing to hold below April resistance highs.